Petrobras'
PBR, -1.16%
preferred shares fell 2.1%, and its ordinary shares declined 1.9% as the company said late Tuesday its share-sale plan will be pushed back until September after regulatory agency completes a related valuation process.

Brazilian lawmakers earlier this month greenlighted a plan under which the government will grant Petrobras the rights to explore and develop five billion barrels of oil in offshore areas in exchange for new shares in Petrobras.

Petrobras had aimed to launch the equity-share offering in July, but the National Petroleum Agency, also known as ANP, still needs to finish its valuation of the oil-field reserves. Petrobras is working on its own report.

"We believe the delay signals the government is trying to push for a more aggressive valuation" of oil rights it will contribute to Petrobras as part of the capitalization, said emerging-market analysts at RBC Capital Markets in a note to clients late Wednesday.

RBC now sees higher odds of the price per barrel being near the higher end of its $4 to $5 per barrel range. At a price of $5 per barrel, the capitalization would be roughly $60 billion, of which $25 billion would be the government's oil contribution, it said.

Traders on the currency market have been closely watching developments surrounding the potentially massive share sale as it should result in significant foreign-exchange inflow. Brazil's currency fell to 1.791 reals per U.S. dollar on Wednesday from Tuesday's level at 1.783 reals.

Brazil's Bovespa index, meanwhile, erased earlier losses to close up 0.5% at 65,160.33, the first close above 65,000 points since mid-May, aided by gains among steel, home building, retail and utility shares.

Argentina closes debt-swap offer

Elsewhere in Latin America on Wednesday, the economy minister of Argentina said the participation rate in a debt-swap offer to creditors holding more than $18 billion in defaulted bonds reached 66%.

That rate, which is above the government's target of 60%, would value the debt-swap offer at $12.1 billion. The creditors participating in the swap offer, launched in April, didn't participate in a 2005 debt restructuring.

Argentina defaulted on about $95 billion in bonds in 2001. With Wednesday's announcement, Argentina will have restructured roughly 92% of its debt. Economy Minister Amado Boudou reportedly said the government will repay its debt with the Paris Club of international creditors at a later date.

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